THE MANAGEMENT ENVIRONMENT CHAPTER 2

Explain what is the external environment and why it is important Discuss how the external environment affects managers Define what organizational culture is and explain why it is important Describe how organizational culture affects managers

EXTERNAL ENVIRONMENT External environment is the factors, forces, situations and events outside the organization that affect its performance

HOW DOES EXTERNAL ENVIRONMENT AFFECT MANAGERS Jobs and employment Assessing environmental uncertainty Managing stakeholder relationships

Stakeholders are any constituencies in an organization’s environment that are affected by the decisions and actions of that organization Good stake holder relationships can: Positively affect organizational performance Be recognized as doing the right thing and show corporate social responsibility Create and Reinforce a positive image of the organization among its stakeholders and community

WHAT IS ORGANIZATIONAL CULTURE? Organizational culture is the shared values, principles, traditions, and ways of doing things that influence the way organizational members act Culture is a perception Organizational culture isn’t concerned with whether members like it Employee describe the culture in similar terms despite their diversity.

HOW DO EMPLOYEES LEARN THE CULTURE Stories Rituals Materials Material symbols Language Organizational culture derives from: The founder’s biases and assumptions about what the organization and its values should be What the first employees learned from their own experiences

HOW DOES ORGANIZATIONAL CULTURE AFFECT MANAGERS Through its effect on what employee do and how they behave Through its effect on what managers do as they plan, organize, lead and control

HOW DOES CULTURE AFFECT WHAT EMPLOYEES DO? A strong culture reflects employee acceptance of, and commitment to, the organization’s key values The stronger the culture, the more it affects employee and manger actions Strong culture preempts the need for formal rules and regulations